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Eazel, creator of the Nautilus file manager, lays off 40 employees

In the wake of an economic environment that is providing
increasingly hostile to Linux and Open Source, Eazel announced Tuesday that it had
laid off 40 employees, leaving 35 employees to carry on the
company's mission of creating a set of tools that would make Linux
as easy to use as the Macintosh.

"What we're doing is getting our burn rate and business plan
more in line with the more sober economic environment," Brian
Croll, Eazel's vice president of marketing, told CNet
News.com. He added that most of cuts occurred in the business
and marketing departments, with few coming from the ranks of
developers.

The layoffs came on the heels of the release of Eazel's first
product, Nautilus 1.0,
which was also released on Tuesday. Nautilus is a Linux-based
file manager that offers an easier-to-use interface than other
Linux tools and is slated to be the default file manager in the
upcoming GNOME 1.4.

Based in Palo Alto, Cal., Eazel was founded by several veterans
of Apple Computer and America Online -- including company
co-founder Andy Hertzfeld, an original developer of the Macintosh
at Apple -- to create a user interface that would put a friendlier
face on Linux. Also involved in the company's founding was Michael
Boich, who founded Apple's software evangelism group for the
Macintosh and later co-founded Radius Inc., which grew to be a $300
million supplier of graphics hardware and software for the
Macintosh. Also involved is Bud Tribble, manager of the original
Macintosh software team and a creator of the Java programming
language during a stint at Sun Microsystems, and Mike Homer,
formerly a senior vice president at America Online.

Creating a wonderful user interface for Linux is one thing, but
making money from it is another -- and it was unclear exactly how
Eazel was (and is) planning on monetizing its product. At one
point, Darin Adler of Eazel told LinuxPlanet's
Michael Hall that the company would not rely of software sales
as a revenue stream, but would rather offer services to Nautilus
users.

"When it's software that needs to be added, we'll make free
software," Adler says. "When it's services, we'll make services
that involve Eazel, and that gives us an opportunity to make
money." These will include software-management tools and outsourced
storage; the subscription program will be initiated on April 30.
Again, with several outsourced storage firms closing up shop in
April (driveway, for example, left the consumer market for a
corporate offering), it's unclear how much of a market there is for
outsourced storage or subscription services.

While the company made some notable licensing deals with Dell,
Sun Microsystems (which plans on replacing the venerable CDE
desktop environment in Solaris with Nautilus and other Eazel
tools), and Red Hat, it was widely known that the company was
having problems raising a second round of financing, having used up
its $15 million of initial funding led by Accel Partners. The
second round has not yet been finalized.

This news follows several other high-profile layoffs in the
Linux world, as
VA Linux,
Turbo Linux,
SuSE, andLinuxgru
ven all have announced cutbacks since the beginning of the
year, while
Corel has announced plans to shed its Linux distribution.